“SpiralFrog.com, a service scheduled to open today, will let Web surfers download songs by U2, Timbaland, Amy Winehouse and other Universal Music Group artists free,” Joseph Menn reports for The Los Angeles Times. “The catch: Consumers have to wait 90 seconds for each track to download, and they must answer questions each month about their buying habits. In addition, the songs can’t be played on iPods or burned onto CDs as they can with 99-cent downloads from the dominant online music store, Apple Inc.’s iTunes.”
“The revenue from advertisers, which so far include Chevrolet and the U.S. Army, is to be split, with the labels and music publishers getting more than half of the total,” Menn reports. “The industry would prefer subscription services, but none of them has taken off despite efforts by major companies such as Yahoo Inc. and RealNetworks Inc. So the record labels are ranging further in pursuit of permanent downloads on terms that aren’t dictated by Apple Chief Executive Steve Jobs.”
MacDailyNews Take: Since nearly everything that Steve Jobs touches turns to gold, perhaps the music cartels would do well to take Jobs’ dictation. It would certainly be preferable to dreaming about unending subscriptions to which nobody in their right mind wants to shackle themselves or participating in “FailuresForSure” like this SpiralFrog debacle.
Menn continues, “Despite a deal with Universal, the world’s largest record label, the New York company’s survival is far from assured… It has burned through more than $10 million in funding and shed a number of its top managers trying to get off the ground.”
“Although the company stresses that it has sold Universal Music Group on the concept of revenue-sharing, the filing shows that SpiralFrog had to pay the record company $2 million as an advance against that revenue,” Menn reports. “Although Universal and the other labels declined to discuss SpiralFrog on the record, executives at two labels said they had serious doubts about the company’s prospects.”
“Among the drawbacks to SpiralFrog are the 90-second wait time that SpiralFrog founder and Chairman Joe Mohen said music-rights owners demanded; the absence thus far of music from the other three major record labels; required monthly visits to the site to keep the music playable; and mandatory survey questions on such topics as how often users attend concerts and whether they are more inclined to buy a band’s music if they agree with the group’s political statements,” Menn reports.
Menn reports, “Probably the biggest negatives are that the tracks can’t be burned onto blank CDs, and they can be transferred only to Windows-compatible mobile players and phones. That leaves out Apple’s market-leading iPod.”
Full article here.
Joe Mandese reports for MediaPost that Joe Mohen, chairman and founder of SpiralFrog, said the thing “is aimed at ‘people who have more time and less money.’ ‘And they’re used to getting it for free,'” said SpiralFrog’s new vice president of marketing and sales, George Hayes, former Universal McCann honcho.
Full article here.
[Thanks to MacDailyNews Reader “macdan2004” for the heads up.]
MacDailyNews Take: Just what advertisers love, people with no money who want things for free. Who wrote SpiralFrog’s business plan, a group of preschoolers at snack time? No wonder they’re having trouble getting the thing off the ground; it doesn’t even fly on paper.
They’ll be gone in less than a year from launch.
Hahaha, its aimed at unemployed people who live with their parents. MDN is right, how the hell did this thing get funding in the first place? What kind of company shoots for a demographic that doesn’t have any money in hopes of turning a profit?
I give it 2 months.
Classic-let’s go after people with no money who want things for free.
Great take!
heh, nice take MDN
“MacDailyNews Take: Since nearly everything that Steve Jobs touches turns to gold”
This is totally untrue. I saw Steve jobs touch a Windows Vista box and then I installed it and it was still crap…..
Said before and here it is again:
These services are NOT ipod-incompatible. The iPod is the incompatible one. APPLE makes the decision not to allow the (freely licensable) WMA/PlaysForSure media to play on its device, and APPLE made the decision recently to prevent other applications from accessing the media on iPods.
UMG gets 2 million dollars from the deal. Nuff’ said.
love the MDN take. This business plan all for the bargain price of 10 million dollars and growing. On the bright side, atleast their spending is helping the economy.
“UMG gets 2 million dollars from the deal.”
Which is probably more than they got from their Zune tax!!
UMG= Unbelieveably Moronic Gomers
This business plan is brilliant! It makes perfect sense to target people who are looking for something for free by making them fill out surveys and wait a minute and a half to download music that won’t work on the overwhelmingly most successful digital music player in the market! I wish I’d though of this one! We all know that people who don’t want to buy music will agree to fill out surveys rather than use something like bittorrent. This is sweet! I think they are going to usher in a a whole new industry with this business model!
“Freely Licensable” perhaps, but the cost is too great.
That’s why Rock Band wireless products won’t be available for the 360 and will be for the PS3.
Developers are tired of being gouged by m$ licensing fees.
They don’t have a chance. There’s plenty of subscription services out there that don’t play on an iPod. Which means they won’t make any money and no one will use there service. The hole idea is a repeat of everything everyone else has tried already and FAILED!
No iPod compatibility, can’t burn the music on a CD? Why bother?
Also, what good will the data from these surveys be if the people filling them out are too cheap to spend money on music? If they won’t buy a song for $.99, then who exactly can use the data collected to sell these deadbeats anything?
The article says that one of the main sponsors is the US Army.
It sounds like a service that is aimed at those with lot’s of free time and no money might be an ideal target audience for US Army recruitment. This is no slam against either party, just rational analysis of the reality.
Madame Fortuna’s crystal ball reveals a Frog Spiralling downward into oblivion.
I wonder if they taste like chicken.
@ MDN “Just what advertisers love, people with no money who want things for free.”
That’s that’s the demographic that the US Army is preying on. If you happened to see “Bowling For Columbine”, there was a segment there in which the Army was heavily targeting/recruiting young men there because of the poor economic conditions of the city of Flint, MI. GM had moved out of town and the city was left in shambles.
US Army Target: Young folks with a seemingly dim future.
I’m not sure about Ford Motor Company. Perhaps someone else could posit a theory.
“Who wrote SpiralFrog’s business plan, a group of preschoolers at snack time?”
Miss Johnson promised her class an extra juice box if they came up with a workable plan for SpiralFrog.
Get them to answer an hour of questions, then give them the DRM-free copies they really want.
Advertising companies already do 1-2 hour sessions before product releases and pay $50-100 per person.
They should’ve stuck with iTunes and Apple.
“US Army Target: Young folks with a seemingly dim future.”
The same could be said for rap music, modeling and pro basketball.
I’m going to tell you…
…how this is going to go down, just like at the new Napster and other subscribtion/ad services.
1: The site will attract users.
2: The users will form offsite post forums and new users will discover them.
3: The more experienced users will teach and trade in free Mp3 with the unexperienced users. Offer DRM crack software and other methods. Filtering software to elliminate the ads. Etc. etc.
The problem is, YOU CAN’T BEAT FREE.
These “other” services attract the low end crowd, the dishonest and the crooks. As soon as the customers of these services come into contact with each other, they will bypass anything you attempt to do in order to get music for free.
So people who use iTunes, and pay 99¢ a song, do so BECAUSE THEY WANT TO COMPENSATE THE ARTISTS.
I have accumulated a huge collection of iTMS music, do I share it? Hell no, I don’t think it’s right for others to get for free which I paid a huge amount for.
My concious is clear, I sleep peacefully at night, if it wasn’t I wouldn’t even bother using iTMS.
Actually, whoever wrote the bizplan had an attack of the smarts.
I mean, what on Earth did they say to persuade dim but rich backers to part with £10 million???!!!
Purleaze can I have a lesson?! Only difference is that I’d squirrel it away in a distant land, and laze in luxury forever and a day…
SPIRAL is the right word… spiralling straight down the toilet.
Ah SpiralFrog! You join the ever-increasing number of businesses that have wisely chosen superior Windows-exclusive technologies. Ah you can taste the bitterness from Mac Losers’ as they languish in their 128kb downloads from the Crapple Music Store, the same bitterness they have when they realize that not only has EMI dumped the Apple DRM to go with Superior Windows DRM technology, but Universal has realized the true power of windows-only technology.
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